Polish fashion retailer LPP, one of Europe’s largest apparel companies, is facing the possibility of being blacklisted by Bangladesh’s garment trade bodies after failing to settle nearly $40 million in outstanding payments owed to local garment manufacturers and buying houses.
According to industry sources, around 40 Bangladeshi factories and buying houses remain unpaid for shipments supplied under sales contracts reportedly guaranteed by LPP. The unpaid orders were linked to FES Retail, the Russian retailer that previously managed payments before business was disrupted by the Russia-Ukraine conflict.
Payments began facing difficulties following the outbreak of the war and reportedly came to a complete halt around 18 months ago, leaving Bangladeshi suppliers with substantial outstanding receivables.
Industry representatives said LPP has distanced itself from FES Retail’s financial obligations and proposed a heavily discounted settlement, which was rejected by affected suppliers. The company also suspended all new sourcing orders from Bangladesh on 30 July 2026, further escalating concerns among exporters.
Bangladesh’s apparel trade associations, including the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), are now considering blacklisting LPP unless the outstanding dues are fully settled, warning that the dispute could undermine confidence in international sourcing relationships.
